Brexit: How, Why and What Next? – Francis Turner
As the media all over the world is telling us, the UK voted fairly convincingly to leave the EU. With a turnout of 72% (higher than recent general elections) the final result was 51.9% leave and 48.1% remain. Most of the media and pretty much all politician everywhere, not to mention endless commenters on social media are saying something along the lines of “How could you do this to us?” and that is generally followed up by a sneer or two – it was the fault of old people, the working class, the stupid low information voters etc. Not to mention suggestions and claims that the Leave people were driven by racism.
Many of these people appear to be imitating the communist party leadership in the German Democratic Republic that Bertold Brecht mocked in his poem Die Lösung (The Solution). In fact you can easily update that poem to today by changing just a few words:
|Nach dem Referendum des 23. Juni
Ließ der Sekretär des Schriftstellerverbands
In der Downingstraße Flugblätter verteilen
Auf denen zu lesen war, daß das Volk
Das Vertrauen der Regierung verscherzt habe
Und es nur durch verdoppelte Arbeit
zurückerobern könne. Wäre es da
Nicht doch einfacher, die Regierung
Löste das Volk auf und
Wählte ein anderes?
|After the referendum of the 23rd of June
The Secretary of the Writers’ Union
Had leaflets distributed in Downing Street
Stating that the people
Had forfeited the confidence of the government
And could win it back only
By redoubled efforts. Would it not be easier
In that case for the government
To dissolve the people
And elect another?
That attitude and the disconnect that it illustrates is probably why the cognoscenti are so shocked. I was back in the UK at the start of June and from what I saw then I changed my mind and went from hoping (without much faith) that Leave would win to expecting that it would – or that if it didn’t the margin to remain would be razor thin. In either case nothing like what conventional wisdom was predicting. It wasn’t that hard to figure out either, all you had to do was talk to people who didn’t live in London and didn’t read the Grauniad. They were heavily in the leave camp. From shop assistants and porters to academics in hard sciences the muttering was clear: the EU has been a disaster and all the claims that we can reform it have failed. Hence, at some point, you just have to quit.
A tale of two cultures
The UK has developed in very different ways to continental Europe, and within the UK the traditional attitudes to many many things are totally different to those across the English Channel. The usual point made is about the UK having common law whereas continental Europe being used to the Napoleaonic Code, but this is far from the only difference.
The UK and its former colonies (including 13 revolting former colonies 🙂 ) are amongst the most generous when it comes to charitable giving and volunteering. The UK’s Charities Aid Foundation has created a “World Giving Index” for the last 6 years and the UK sits there at around #6 or so with the majority of the countries above it being former colonies. With the exception of the Dutch (who, curiously, also want a referendum about remaining in the EU) the rest of Europe is a long way down the list. In monetary terms some 75% of the UK population gives to charity every year whereas, again with the exception of the Dutch, everyone else is under 60% (and most are under 50%). Continental Europe on the other hand believes that the state should provide. The things that are not state funded in the UK include the coastal lifeboats (mostly provided by the RNLI) and light houses (Trinity House). For a nation which depends on maritime commerce to survive this might seem surprising but these are far from the only such things. Historically the UK was a leader in Friendly Societies, Cooperatives, Mutual Insurance and so on and in general the state’s aid (or possibly interference) in matters has been limited. Indeed until the proportion of government spending as part of GDP in the UK is generally lower than most EU nations, despite the fact that the UK has the (roughly) joint largest military and an almost fully nationalized and tax funded health service.
The point is that the traditional UK attitude was for self-organization to fix problems and not to expect the government to do it or organize it. To some extent this has been eroded as the state has muscled in, but particularly in the countryside, the traditions still hold. Moreover there is a very strong case to be made the this tradition of lighter government involvement, particularly since the 1980s privatizations under Mrs Thatcher, has helped the UK grow in ways that the rest of Western Europe hasn’t. This economic health mean that the UK has become a place other people want to live in.
One of the major arguments of the campaign was about immigration. For the most part the Remain side were quite happy with the levels of immigration while the Leave side thought it was far too high. This does not mean, in any way, that the Leave side wanted to kick out all the (recent) immigrants. There are, perhaps, a few who feel that way but I suspect they are in no greater in number than the number of people who think the UK should simply have completely open borders and let anyone in that wants to come.
The UK is a small country. It has roughly same population as France compressed into a third the space and a significant proportion of the space is Northern Scotland which is very sparsely populated. Not only that but the UK has far lower unemployment rates (and higher labour participation rates) than most (all?) of Europe as well as a fairly generous welfare state. The result is that lots and lots of people want to live and work in the UK. This has been true for a while – the number of French citizens in London make it (IIRC) the 5th largest French city by population of French citizens, somewhere about the size of Nice – but the extension eastwards of the EU to Romania and Bulgaria, as well as the general influx of non European migrants into the EU, has lead to a large increase in recent immigrants. It is worth noting that non EU migrants seem to like the UK to such an extent that there is a large camp of them in Northern France who could go to any other part of the mainland of Europe but want to come to the UK instead. Why might that be?
Most people in the UK are fine with migrants up to a point and, while there have been issues with certain communities (Rochdale, Bradford…), people take pride in the developments of their immigrants such as the fact that Chicken Tikka Masala was invented in Birmingham. Going to a kebab shop or a curryhouse after a night out drinking is part of life in Britain. British people have had Indians, West Indians, Africans and so on as neighbours for decades. They’ve had Polish builders, Hungarian plumbers and Czech nannies for a good decade as well as numerous Italian and French (and Indian and Chinese) restaurants and so on for longer. And, in general, they are fine with continued immigration. What they want, however, is immigration at a rate of a few tens of thousands a year whereas what the last few years have shown is that immigration rates are ten times that (anywhere from 250,000 to 500,000 depending on statistics).
Immigration at a rate of 0.5% to 1% of the existing population (a population which is having babies and growing anyway) puts a huge strain on jobs, housing as well as health and education services. It isn’t particularly racist to wonder why one’s own children or friends/relatives are unable to find affordable housing when the population is growing faster than the housing stock, neither is it racist to wonder why doctor’s appointments and school places (in schools that are actual permanent buildings) are hard to come by.
In fact I would say that the sneering dismissal that came when people dared to mention those sorts of very practical issues was a major incentive for people to vote leave. When that is combined with the prospect of visa free travel for Turkey and the way that the government came over all shifty when it came to actual immigrant numbers it is hardly a surprise that people didn’t vote for a position that had no prospect of slowing the flow.
Project Fear vs Project Hope
The remain campaign, when they weren’t sneering, were doing their best to scare voters. It seemed every other day some group or other predicted doom and destruction if the UK voted leave. In many cases the gloom was so overwrought that it was a joke. The list of prognostications and prognosticators was endless and many were silly. Why would a hit show like Game of Thrones no longer be filmed in the UK if certain EU film subsidies and tax breaks were not offered? And if that were the case who, beyond a few fragile thespians, would actually care? Why (and indeed how) would the EU immediately block all trade to the UK? Why would British scientists no longer have any research funding? Why would it be impossible to collaborate with European companies and universities? And so on. Moreover why would the average voter believe these people when they were the same ones who came up with almost the same arguments to try and get the UK to join the Euro? The remain campaign offered no positive reason to stay in the EU, just one dire threat after another about the dangers of leaving. Oddly they seemed surprised at the enthusiasm gap that opened up in opinion polls that showed that voters for the Leave side were massively more enthusiastic than those on the remain side.
By contrast, however, the Leave campaign were optimistic and, critically I think, funny. The Leave campaign leaders, particularly Nigel Farage and Boris Johnson, were generally witty and all of them managed to think fast enough on their feet to outwit their hostile interviewers (and yes, almost 100% of the interviews were hostile). After a while the fact that Vote Leave’s claims figures were also a bit iffy didn’t matter, everyone with a brain could see that the Remain figures were extracted from various bovine anal orifices, so the fact that Leave played slightly loose with the truth was ignored.
American readers may think this bears a resemblance to the Trump campaign and I suspect that this is no accident. The people running Vote Leave are not idiots and they are quite capable at looking at what works in other countries and replicating it. Just as Trump talks about making America great again, so too the Leave speakers were talking about the vibrant historical past of the UK and its rosy future when not under the boot of the EU. They were vague – they had to be, in part because they don’t agree on the post Brexit future – but they were all optimistic.
In the end it was a choice between a side that failed to acknowledge any problems with the way things are today and threatened the apocalypse if things went wrong and a side that said that “yes things aren’t so great now but we can fix them if we’re free to do our own thing”. On the whole message about freedom to choose won.
In the short term panic. Some of that panic may be justified for the people panicking. The EU bureaucracy as a whole can quite justifiably be in a huge funk because their jobs, their gravy train and their golden retirements are all on the line. In most cases however the panic is not at all justified. The UK will not abruptly leave the EU tomorrow. Even if the UK were to make an official leave request under article 50 of the Treaty of Lisbon there are two years before an actual exit must occur. Until the UK actually leaves it will still be paying Brussels large sums of money and getting some of that back in various subsidies and grants. Likewise no one will be forced to move – neither expat Brits abroad nor EU citizens in the UK. I anticipate that things will settle down in a few days as the majority of the world decides that this is not in fact the end of times and then things will be very very similar to the way they were last month.
In the medium term it will all depend on the treaty. We have almost no idea what a real treaty will look like because almost everyone who would be required to negotiate that treaty has been telling the UK that the world will end. However when they stop having a tantrum and start getting serious the likelihood is that there will be some sort of free trade agreement and a more restrictive set of rules for residency. We may see more British retirees staying in the UK instead of retiring in the sun, we will probably see rather fewer Eastern Europeans living in the UK. There may be inflation in the UK as prices of imports rise and quite possibly there will be a related export boom as prices of UK products become more attractive to the rest of the world. Likewise the UK may see a tourism boom. Beyond that probably not too much. Trade will continue and the UK will – after some adjustments – almost certainly continue to grow faster than the EU. The one thing I am pretty damn certain of is that the City of London will remain the primary market for European timezones. Some trading will undoubtedly move to Dublin and Frankfurt but I doubt it will be as much as the naysayers of Vote Remain predicted. Just as New York remains a major market in the US, despite tax laws that seem designed to induce businesses to flee and just as Silicon Valley remains the hub of VC funded IT despite all sorts of issues from tax to drought the infrastructure is so embedded in the UK that it can’t move. Indeed if the UK government is smart it will end up attracting more business by providing reductions in effective corporation tax and the like.
In the longer term it’s all going to depend on the stability of the EU and the policies of the UK government. All of which are the result of the bahaviour and actions of politicians, irrational beings at the best of times.
Larger Political Implications
The big question that everyone is asking is about the future of the EU. As someone who has wanted to the see the EU collapse for at least a decade I’m on the side of hoping that it does collapse, but I suspect that EU politics are such that it won’t die as soon as I hope. More likely we will see votes to leave by, at least, the more economically vibrant non Euro members (Denmark and Sweden) and some rather extreme politicians becoming more mainstream all across the continent. Eventually the EU will die because there is no desire amongst the populace at large for “ever closer union” and the Euro is a currency that will be studied by future economists as an example of what not to do. However its death throes are likely to be both protracted and messy.
Assuming the UK negotiates a reasonable free trade agreement and the UK government continues to be run by politicians with clue (yes those are fairly major assumptions) then the UK could well end up being the anchor to a revitalized EFTA that consists of itself plus most of the Nordic nations, plus Switzerland and acts as a default exit for those Eastern European nations that bought into the EU mostly to protect themselves from a resurgent Russia. Again assuming smart UK politicians, this new EFTA could well end up including other unaffiliated developed economies such as Japan, Australia and New Zealand as well as, say, India, Singapore and Malaysia. Played properly it will form the basis of a global FTA as it will end up merging with NAFTA and nurturing an African FTA. Some of this is certainly optimistic, but, although the economies of most African nations are tiny, they are growing faster than any other part of the world and a smart optimistic politician would seek to tie the UK to such a region. (Sarc) Who knows we might call the thing a Commonwealth (/Sarc)
On the negative side, it is quite possible that Scotland will decide to separate from the UK and rush to join the EU. There is a significant fraction of the English population that sees Scotland as a bunch of freeloaders who inflicted the “New Labour” government of Blair and Brown on the rest of the UK so that divorce may be quicker and nastier than Scots expect. I have no doubt that EU politicians will welcome them and that Scotland will end up regretting its choice. Depending on who is in power in London at the time, it is quite likely that Scotland will not be bailed out again (the union of 1707 was essentially because Scotland was utterly bankrupt) because of the aforementioned perceived grudge aganst the ungrateful freeloaders. If so the only way it will survive is to embrace all sorts of policies (fracking, free markets) that the SNP hates. Probably this will be a good thing since it might help Scotland regain the mindset that led it to provide so many influential writers and politicians to Great Britain (and thence the world) in the 18th and 19th centuries, but I imagine it will be painful.
Another big question is Ireland. The English oppressed Ireland mightily for some 900 years so it is understandable that the Irish Republic was keen to join the EEC/EU since it wasn’t dominated by England. Similarly the creation of Northern Ireland is something that any dispassionate external observer has to consider a mistake – indeed there’s probably a lot of lternate history where Ireland is grated home rule in the 1890s as an entire island. Hence given that Northern Ireland also voted to remain (though not as strongly as Scotland and with significant areas voting to leave) it is not impossible that another result of the referendum is Irish reunification as a part of the EU.
However despite their love of the EU because it isn’t England I’m not so sure the Irish really have much in common with continental Europe. If the UK and the Nordic countries were to form some kind of EFTA and the Euro collapses again it is quite possible Ireland would seek to join that.
All of this future depends heavily on voters electing moderately sane politicians and, sadly, although the UK will almost certainly avoid insane politicians because of the referendum, there is a strong possibility that the establishment in other countries will fail to learn the lessons and end up ceding their power to something nastier.
The great and the good of the UK – that is the BBC, most elected politicians and journalists as well as the “intelligentsia” – did their best to paint the Leave campaign as a bunch of xenophobic “little Englanders”. They failed in large part because a large chunk of the ruling Conservative party MPs as well as some significant Labour party MPs were clearly not extremists. Had few or no mainstream politicians gone for Leave things would have been far worse as it would have been much simpler to paint the UK Independence Party (UKIP) as said xenophobes, even though a deeper inspection would probably have show that UKIP itself is a coalition and much of the coalition are not xenophobic. The result of this referendum is sure to cause some political earthquakes in the UK. I would not be surprised to see Labour become a party of just the Right on SJW forces combined with some nasty Islamic radicals, while UKIP hoovers up their former white working class base in England and Wales (the SNP already got their Scottish working class votes). However although the dynamics will change I don’t expect the UK to elect a truly extremist party to govern anything other than a local council and probably not even that.
It is my belief that the UK dodged a bullet here. In almost every other country in the EU, the anti-EU forces are fascist, nationalist or socialist (and some combine elements of all). Perhaps worse these parties have been successfully labeled as such, whether or not they actually are, and as a result they are attracting the would-be jackbooted thugs even if they didn’t want them. This will not end well. In Europe immigration and unemployment/economic growth are huge causes of discontent. The elites have done their best to label anyone who complains about either as an extremist and this is going to come back and bite them hard. Unless they actually address the issues, we will either see elections where the “extremist” parties win (see Germany/Italy in the 1930s) or we will see revolution and civil war (Spain in the 1930s) and by the time the extremists take to power the economies will be so screwed up that idiotic measures like protectionism will seem to make sense. Some European politicians made noises today about the need to listen to the people and some “extremist” parties aren’t yet so demonized that the extremists are in control, but there’s not much time before disaster is set in motion. In some countries it may be too late.
Thanks to President “l’escroc” Chirac and his successor Sarkozy failing to kill the unions and liberalize the labour laws I think France is hosed. While the current leader of the Front National (Marine Le Pen) is slightly less xenophobic than her predecessor (and father) her proposed economic policies, should she manage a Frexit, make Donald Trump and Bernie Sanders both seem sane and moderate. Should be become elected France will do its best to imitate those powerhouses of 1970s economic growth: Brazil and Argentina. On the other hand as the current president is discovering without a way to control the unions, labour reform of any sort is impossible, and without that France is stuck in a world of high unemployment.
The good news is that if the UK thrives in a post Brexit world, the chances are higher that most of Europe will figure out the problem and adjust themselves instead of insisting that the UK shoot itself in the foot too to make everything equal.